Kamis, 17 Februari 2011

“Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” (Lamb, 1984:ix).

Strategic management as a discipline originated in the 1950s and 60s. Although there were numerous early contributors to the literature, the most influential pioneers were Alfred D. Chandler, Philip Selznick, Igor Ansoff, and Peter Drucker.

Alfred Chandlerrecognized the importance of coordinating the various aspects of management under one all-encompassing strategy. Prior to this time the various functions of management were separate with little overall coordination or strategy. Interactions between functions or between departments were typically handled by a boundary position, that is, there were one or two managers that relayed information back and forth between two departments. Chandler also stressed the importance of taking a long term perspective when looking to the future. In his 1962 groundbreaking workStrategy and Structure, Chandler showed that a long-term coordinated strategy was necessary to give a company structure, direction, and focus. He says it concisely, “structure follows strategy.”

In 1957,Philip Selznickintroduced the idea of matching the organization's internal factors with external environmental circumstances.This core idea was developed into what we now callSWOT analysisby Learned, Andrews, and others at the Harvard Business School General Management Group. Strengths and weaknesses of the firm are assessed in light of the opportunities and threats from the business environment.

Igor Ansoffbuilt on Chandler's work by adding a range of strategic concepts and inventing a whole new vocabulary. He developed a strategy grid that compared market penetration strategies, product development strategies, market development strategies andhorizontalandvertical integrationand diversification strategies. He felt that management could use these strategies to systematically prepare for future opportunities and challenges. In his 1965 classicCorporate Strategy, he developed thegap analysisstill used today in which we must understand the gap between where we are currently and where we would like to be, then develop what he called “gap reducing actions”.

Peter Druckerwas a prolific strategy theorist, author of dozens of management books, with a career spanning five decades. His contributions to strategic management were many but two are most important. Firstly, he stressed the importance of objectives. An organization without clear objectives is like a ship without a rudder. As early as 1954 he was developing a theory of management based on objectives.[7]This evolved into his theory ofmanagement by objectives(MBO). According to Drucker, the procedure of setting objectives and monitoring your progress towards them should permeate the entire organization, top to bottom. His other seminal contribution was in predicting the importance of what today we would call intellectual capital. He predicted the rise of what he called the “knowledge worker” and explained the consequences of this for management. He said that knowledge work is non-hierarchical. Work would be carried out inteamswith the person most knowledgeable in the task at hand being the temporary leader.

In 1985,Ellen-Earle Chaffeesummarized what she thought were the main elements of strategic management theory by the 1970s:

Strategic management involves adapting the organization to its business environment.

Rabu, 16 Februari 2011

Strategic planningis anorganization's process of defining itsstrategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, includingSWOT analysis(Strengths, Weaknesses, Opportunities, and Threats ),PEST analysis(Political, Economic, Social, and Technological),STEER analysis(Socio-cultural, Technological, Economic, Ecological, and Regulatory factors), and EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal).

Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions.

"What do we do?"

"For whom do we do it?"

"How do we excel?"

In business strategic planning, some authors phrase the third question as "How can we beat or avoid competition?". (Bradford and Duncan, page 1). But this approach is more about defeating competitors than about excelling.

In many organizations, this is viewed as a process for determining where an organization is going over the next year or - more typically - 3 to 5 years (long term), although some extend their vision to 20 years.

In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the "strategic plan."

It is also true that strategic planning may be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Therefore, strategic innovation and tinkering with the 'strategic plan' have to be a cornerstone strategy for an organization to survive the turbulent business climate.

Etymology

Coined in English 1825, the wordstrategicis of military origin, from theGreek"στρατηγικός" (strategikos), "of or for a general",[1]from "στρατηγός" (strategos), "leader or commander of an army, general",[2]a compound of "στρατός" (stratos), "army, host" + "ἀγός" (agos), "leader, chief",[3]in turn from "ἄγω" (ago), "to lead".[4]

Vision statements, Mission statements and values

Vision:Defines the desired or intended future state of an organization or enterprise in terms of its fundamental objective and/or strategic direction. Vision is a long-term view, sometimes describing how the organization would like the world to be in which it operates. For example, a charity working with the poor might have a vision statement which reads "A World without Poverty."

Mission:Defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its Vision.

It is sometimes used to set out a "picture" of the organization in the future. A mission statement provides details of what is done and answers the question: "What do we do?" For example, the charity might provide "job training for the homeless and unemployed."

Values:Beliefs that are shared among thestakeholdersof an organization. Values drive an organization's culture and priorities and provide a framework in which decisions are made. For example, "Knowledge and skills are the keys to success" or "give a man bread and feed him for a day, but teach him to farm and feed him for life". These example values may set the priorities of self sufficiency over shelter.

Strategy:Strategy, narrowly defined, means "the art of the general" (from Greekstratigos). A combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there.

Organizations sometimes summarize goals and objectives into amission statementand/or avision statement. Others begin with a vision and mission and use them to formulate goals and objectives.

While the existence of a shared mission is extremely useful, many strategy specialists question the requirement for a written mission statement. However, there are many models of strategic planning that start with mission statements, so it is useful to examine them here.

AMission statementtells you the fundamental purpose of the organization. It defines the customer and the critical processes. It informs you of the desired level of performance.

AVision statementoutlines what the organization wants to be, or how it wants the world in which it operates to be. It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria.

An advantage of having a statement is that it creates value for those who get exposed to the statement, and those prospects are managers, employees and sometimes even customers. Statements create a sense of direction and opportunity. They both are an essential part of the strategy-making process.

Many people mistake the vision statement for the mission statement, and sometimes one is simply used as a longer term version of the other. The Vision should describe why it is important to achieve the Mission. A Vision statement defines the purpose or broader goal for being in existence or in the business and can remain the same for decades if crafted well. A Mission statement is more specific to what the enterprise can achieve itself. Vision should describe what will be achieved in the wider sphere if the organization and others are successful in achieving their individual missions.

A mission statement can resemble a vision statement in a few companies, but that can be a grave mistake. It can confuse people. The mission statement can galvanize the people to achieve defined objectives, even if they are stretch objectives, provided it can be elucidated inSMART(Specific, Measurable, Achievable, Relevant and Time-bound) terms. A mission statement provides a path to realize the vision in line with its values. These statements have a direct bearing on the bottom line and success of the organization.

Which comes first? The mission statement or the vision statement? That depends. If you have a new start up business, new program or plan to reengineer your current services, then the vision will guide the mission statement and the rest of the strategic plan. If you have an established business where the mission is established, then many times, the mission guides the vision statement and the rest of the strategic plan. Either way, you need to know your fundamental purpose - the mission, your current situation in terms of internal resources and capabilities (strengths and/or weaknesses) and external conditions (opportunities and/or threats), and where you want to go - the vision for the future. It's important that you keep the end or desired result in sight from the start.

Features of an effective vision statement include:

Clarity and lack of ambiguity

Vivid and clear picture

Description of a bright future

Memorable and engaging wording

Realistic aspirations

Alignment with organizational values and culture

To become really effective, an organizational vision statement must (the theory states) become assimilated into the organization's culture. Leaders have the responsibility of communicating the vision regularly, creating narratives that illustrate the vision, acting as role-models by embodying the vision, creating short-term objectives compatible with the vision, and encouraging others to craft their own personal vision compatible with the organization's overall vision. In addition, mission statements need to be subjected to an internal assessment and an external assessment. The internal assessment should focus on how members inside the organization interpret their mission statement. The external assessment — which includes all of the businesses stakeholders — is valuable since it offers a different perspective. These discrepancies between these two assessments can give insight on the organization's mission statement effectiveness.

Another approach to defining Vision and Mission is to pose two questions. Firstly, "What aspirations does the organization have for the world in which it operates and has some influence over?", and following on from this, "What can (and/or does) the organization do or contribute to fulfill those aspirations?". The succinct answer to the first question provides the basis of the Vision Statement. The answer to the second question determines the Mission Statement.

Strategic planning outline

The preparatory phase of a business plan relies on planning. The first chapters of a business plan include Analysis of the Current Situation and Marketing Plan Strategy and Objectives.

Analysis of the current situation - past year:

Business trends analysis

Market analysis

Competitive analysis

Market segmentation

Marketing-mix

SWOT analysis

Positioning - analyzing perceptions

Sources of information

Marketing plan strategy & objectives - next year

Marketing strategy

Desired market segmentation

Desired marketing-mix

TOWS-based objectives as a result of the SWOT

Position & perceptual gaps

Yearly sales forecast

According to Arieu, "there is strategic consistency when the actions of an organisation are consistent with the expectations of management, and these in turn are with the market and the context" (S.K. Sharman in Human Resource Management: A Strategic Approach to Employment)

Methodologies

There are many approaches to strategic planning but typically a three-step process may be used:

Situation- evaluate the current situation and how it came about.

Target- define goals and/or objectives (sometimes called ideal state)

Path / Proposal- map a possible route to the goals/objectives

One alternative approach is calledDraw-See-Think

Draw- what is the ideal image or the desired end state?

See- what is today's situation? What is the gap from ideal and why?

Think- what specific actions must be taken to close the gap between today's situation and the ideal state?

Plan- what resources are required to execute the activities?

An alternative to theDraw-See-Thinkapproach is calledSee-Think-Draw

See- what is today's situation?

Think- define goals/objectives

Draw- map a route to achieving the goals/objectives

In other terms strategic planning can be as follows:

Vision- Define the vision and set a mission statement with hierarchy of goals and objectives

Formulate- Formulate actions and processes to be taken to attain these goals

Implement- Implementation of the agreed upon processes

Control- Monitor and get feedback from implemented processes to fully control the operation

Situational analysis

When developing strategies, analysis of the organization and its environment as it is at the moment and how it may develop in the future, is important. The analysis has to be executed at an internal level as well as an external level to identify all opportunities and threats of the external environment as well as the strengths and weaknesses of the organizations.

There are several factors to assess in the external situation analysis:

Analysis of the external environment normally focuses on thecustomer. Management should be visionary in formulating customer strategy, and should do so by thinking about market environment shifts, how these could impact customer sets, and whether those customer sets are the ones the company wishes to serve.

Analysis of the competitive environment is also performed, many times based on the framework suggested byMichael Porter.

Goals, objectives and targets

Strategic planning is a very importantbusinessactivity. It is also important in thepublic sectorareas such aseducation. It is practiced widely informally and formally. Strategic planning and decision processes should end with objectives and a roadmap of ways to achieve them.

One of the core goals when drafting a strategic plan is to develop it in a way that is easily translatable into action plans. Most strategic plans address high level initiatives and over-arching goals, but don’t get articulated (translated) into day-to-day projects and tasks that will be required to achieve the plan. Terminology or word choice, as well as the level a plan is written, are both examples of easy ways to fail at translating your strategic plan in a way that makes sense and is executable to others. Often, plans are filled with conceptual terms which don’t tie into day-to-day realities for the staff expected to carry out the plan.

The following terms have been used in strategic planning: desired end states, plans, policies, goals, objectives, strategies, tactics and actions. Definitions vary, overlap and fail to achieve clarity. The most common of these concepts are specific, time bound statements of intended future results and general and continuing statements of intended future results, which most models refer to as either goals or objectives (sometimes interchangeably).

One model of organizing objectives uses hierarchies. The items listed above may be organized in a hierarchy of means and ends andnumberedas follows: Top Rank Objective (TRO), Second Rank Objective, Third Rank Objective, etc. From any rank, the objective in a lower rank answers to the question "How?" and the objective in a higher rank answers to the question "Why?" The exception is the Top Rank Objective (TRO): there is no answer to the "Why?" question. That is how the TRO is defined.

People typically have several goals at the same time. "Goal congruency" refers to how well the goals combine with each other. Does goal A appear compatible with goal B? Do they fit together to form a unified strategy? "Goal hierarchy" consists of the nesting of one or more goals within other goal(s).

One approach recommends having short-term goals, medium-term goals, and long-term goals. In this model, one can expect to attain short-term goals fairly easily: they stand just slightly above one's reach. At the other extreme, long-term goals appear very difficult, almost impossible to attain.Strategic managementjargon sometimes refers to "Big Hairy Audacious Goals" (BHAGs) in this context. Using one goal as a stepping-stone to the next involvesgoal sequencing. A person or group starts by attaining the easy short-term goals, then steps up to the medium-term, then to the long-term goals. Goal sequencing can create a "goal stairway". In anorganizationalsetting, the organization may co-ordinate goals so that they do not conflict with each other. The goals of one part of the organization should mesh compatibly with those of other parts of the organization.